It’s not uncommon for landlords to have to deal with nonpaying tenants at one point or another, but another thing that some may not consider is having a tenant who pays rent but skips out on utility payments, either for their final month in the property or for even longer. When utility bills have been going unpaid, who’s responsible? Do you have to cover for tenants who bailed, or do you have some recourse?
First things first: always go back to the rental agreement.
If you have a comprehensive rental or lease agreement, then you should have a section that details who’s responsible for which utilities. In some instances, the tenant is responsible for all utilities, while in others the utilities may be split between the landlord and the tenant. For example, in an apartment complex, the property owner or landlord may cover trash pickup and water, while the tenant is responsible for gas, electricity, and other bills. This varies by type of property, as well as local laws. Always confer with your legal counsel about what you have to cover, legally.
Once you know what you’re responsible for and what the tenant should cover, you can move forward. Even if you’re pretty sure you know, check your agreement anyway just to be sure. This should indicate to you whether utilities are registered under your name or the tenant’s name. If the unpaid utilities are under the tenant’s name, then you should not legally be responsible for repaying their late payments or fees. However, if the utilities remain under your name for any reason, you’re likely on the hook to pay. If this were the case, you probably would have noticed missed payments before the tenant’s move-out date, but it’s possible something was overlooked.
What do you do if a tenant leaves you holding a very expensive bag of missed utility bills that you’re now responsible for? You may want to strongly consider taking them to small claims court to get back some of your lost revenue. It’s up to you to weigh your options and decide if the amount lost is worth the additional hassle and time commitment. On the other hand, if the tenant skipped out on bills that are still under their name, then the utility company will have to take legal action themselves to get their money – they can’t force you to pay if you’re not legally obligated.
It’s always possible to end up with a less-than-stellar tenant, but if you use a screening service during the application process, it can significantly reduce your risk of dealing with a nonpaying tenant. We recommend our RentalConnect program as an added tool for selection the right tenants for your property. RentalConnect offers property owners and landlords a great alternative to the expense of full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient, especially for those with less experience in property management. The $34.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search.
Landlords Property Managers Contact TSCI